Natural Disaster and Economic Policy for ASEAN and the Pacific Rim: A Proposal for a Disaster Risk Reduction ‘Seal of Approval’ Fund

Many of the most destructive natural disasters of the past few decades occurred in ASEAN or other Pacific Rim countries. Even without these catastrophic infrequent events, some ASEAN members are buffeted by repeated and very frequent natural disasters; and many are very vulnerable to future disasters associated with the changing climate. The chapter employs a typology of disaster impacts that distinguishes between direct and indirect damages; with the indirect costs accounted for in the aggregate by examining variables such as GDP, the fiscal accounts, consumption, investment, and the balance of trade and the balance of payments. These costs can also be further divided between the short- and long-run. These distinctions are used in the discussion that analyzes vulnerabilities in the ASEAN region. The chapter concludes by identifying needed future government policy changes, in particular the construction of better and more robust early-warning systems, and suggests that the best way to incentivize disaster risk reduction (DRR) policy is through a dedicated fund, a Global Fund for DRR, that will support this work.